PEER GROUP: "Most consumers aren't comparing their banks to other banks," says Wayne Busch at Accenture.
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How Banks Can Win Back 'Mind Share' from PayPal, Google, Amazon

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A good role model for U.S. banks, the Accenture team says, is Garanti Bank in Turkey. Last year, the bank launched a mobile app that provides mobile payments, personal financial management tools, and location-based merchant discounts as well as basic banking. Garanti partners with Foursquare and merchants for the location-based discounts. The app also analyzes transaction data to provide savings suggestions for users and estimate how much money they will have in their account for the rest of the month. It offers "impulse saving" tools and provides access to the bank's loan products.

There are always data privacy concerns about using customers' data. In an example made famous by The New York Times two years ago, retailer Target's data scientists found that women in the first 20 weeks of pregnancy tend to buy large quantities of certain products (such as lotion and dietary supplements), and marketed to them accordingly. One day a father stormed into a store, angrily demanding to know why his teenage daughter was being sent coupons for maternity clothing and nursery furniture. A few days later, after talking to his daughter, the father sheepishly admitted that the store had guessed correctly: she was pregnant.

Anecdotes like this will keep cropping up as companies mine customer data more deeply.

"As they try to become more customer-centric and provide additional advice, organizations will stub their toe occasionally," Busch says.

But if a bank repeatedly makes useful, worthwhile recommendations, its occasional missteps will be outweighed by the sense that it's looking out for the customer's best interest, Busch says.

And if bank customers are worried about banks' use of their financial data, they don't say so in surveys. In a study of 23,000 consumers in 23 countries conducted in late 2013, Accenture found that consumers trust banks far more with their personal data than telecom providers and Google. Close to half - 41% - said the type of company (out of a list of options) they trust most with their personal data is their bank. Less than a third (27%) said it was their mobile network provider, and less than a quarter (23%) said Google. Smaller numbers place their trust in Facebook (14%), Apple (12%), Amazon (8%) or Twitter (5%).

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Comments (1)
A story about online payments and still no mention of the two elephants that are approaching, MasterCard's "MasterPass" and Visa's "V.me"--regardless ...

For a start, none of these middlemen, PayPal, Google or Amazon et al, will ever be banks because they don't want to be banks; they don't want to be subjected to the "onerous" licensing and regulation that real banks are usually subjected to; they, in the main, are happy to ride on the backs of the banks' existing systems as simply "credit card merchants" via their own retail banker, so "the banks" aren't missing out on much except that the bank servicing the individual middleman is getting a bigger volume slice albeit at a lesser discount fee than they otherwise might have been getting ...

The likes of the notorious, un-FDIC insured, virtually unregulated "PreyPal", in particular, prefers to have unfettered use of their naive depositors' funds; indeed, the fact that eBay's clunky "PreyPal" faux "bank" has managed to effectively skirt around banking regulations has always amazed me!--amazing what all that "free speech" money can do, is it not?

Regardless, all the retail banks have to do to drive the likes of "PreyPal" back into its eBay pine box is to more actively promote to their existing online credit card merchant account users the new, generic, digital wallet extensions of their credit card services now being offered by both MasterCard ("MasterPass") and Visa ("V.me") ...

PayPal at the likes of Home Dept? Next time you visit Home Depot, ask the cashier how the, undoubtedly eBay subsidized, "Pay Here With PayPal" operation is going--LOL

But, by all means, banks should get on with taking back that "mind share", and put the clunky "PreyPal" back into its eBay pine box ...
Posted by PhilipCohen | Saturday, May 31 2014 at 2:48PM ET
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